FCA reveals plans for action on platform charges

Any Financial Conduct Authority (FCA) crack down on charge transparency on platforms will have to wait until firms have got to grips with Mifid II, the regulator has said.

In today's interim report for its platform market study, the FCA found a number of concerns about price transparency and complexity.

The findings included the fact 30 per cent of advised clients either did not think they paid for their platform, or were unable to say whether they did or didn't.

But the FCA's director of competition, Mary Starks, told FTAdviser while the regulator was not happy with the findings it would hold off judgement on this issue until firms have had more time to get to grips with Mifid II.

She said: "The issue with charge transparency is of course that Mifid II does quite a lot to bring that information together in a single figure.

"It is fair to say we are still at the beginning of seeing how firms are going about complying with Mifid II and how prominent and salient they are making that information to consumers.

"We want to see firms complying with the letter of Mifid II and the spirit of it. We are hoping that we will be able to say a bit more in the final report because we will have had a bit longer to see the impact of Mifid II."

The FCA found most platforms charged a large number of fees and their pricing structures differed in terms of when a fee is incurred, the level of the fee and the way it is set.

The regulator said it could not find a convincing explanation for the level of complexity and the lack of transparency it found.

Ms Starks added that the FCA did not find any difference between charge transparency at vertically integrated firms and those which weren't.

Earlier this year the FCA's chief executive, Andrew Bailey, told MPs the regulator would start holding firms to account for failing to comply with Mifid II rules, which came into force at the start of the year.

With regards to charge complexity, the FCA found adviser platforms fall into two groups: about half of those it reviewed had a relatively small number of fees - between one and seven - whereas the other half had between 15 and 35.

For about a third of platforms in the FCA's 29 platform sample pricing information was "not straightforward to find". The FCA said this was more common for adviser platforms.